1:24-cv-01577
D. Colo.Mar 13, 2025Background
- Plaintiff Kimberly Segura alleges that Avenue5 Residential, LLC imposed undisclosed and unauthorized fees ("junk fees") on tenants, including herself, during her tenancies in Avenue5’s properties from 2021 to 2023.
- Segura signed two leases: a first lease (2021–2022) with a class action waiver, and a second lease (2022–2023) without such a waiver.
- The disputed fees included pest control, valet trash, additional trash, and "territorial" fees, as well as allegedly excessive late fees.
- Segura claims these fees were not disclosed up front and only revealed after tenants had incurred significant, non-refundable costs.
- Plaintiff brought a putative class action alleging Colorado Consumer Protection Act (CCPA) violations, breach of contract, violation of statutory late fee rules, unjust enrichment, and seeking declaratory judgment.
- Defendant Avenue5 removed the case to federal court and moved to dismiss all claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class Action Waiver | Waiver violates public policy and should not bar class claims. | Waiver is valid and enforceable, barring class claims under first lease. | Waiver is enforceable for first lease only; class claims arising under second lease proceed. |
| CCPA Deceptive Trade Practices | Alleged deceptive conduct and non-disclosure of fees affected a broad segment of public. | No actionable deception; fees not prohibited by statute; pure contract breach. | Well-pled claim of public impact and deception; claim proceeds past dismissal. |
| Breach of Contract & Good Faith | Double billing and imposition of unauthorized fees violate lease terms and good faith. | Lease allowed broad utility charges; fees covered by contract terms. | Factual disputes over fee authorization; claims plausible and not foreclosed. |
| Unjust Enrichment | Permissible to plead in alternative to contract claims; may address broader conduct. | Precluded where express contract exists covering subject matter. | Alternative pleading permitted at this stage; unjust enrichment survives dismissal. |
| Declaratory Judgment | Ongoing controversy due to debt collection for disputed fees; requires judicial resolution. | No longer active dispute; moot. | Ongoing controversy established; standing exists; claim survives. |
| Possibility of Class Certification | Alleged common course of deceptive conduct across classes supports certifiability. | Fee variation between buildings precludes commonality/class ascertainment. | Sufficient facts pled for class; dismissal not warranted at this stage. |
Key Cases Cited
- Forest Guardians v. Forsgren, 478 F.3d 1149 (10th Cir. 2007) (standard for pleading sufficient facts to state a claim under Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for factual allegation in complaint)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaints must state a plausible claim for relief)
- Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142 (Colo. 2003) (CCPA requires public impact and deceptive practice to proceed)
- Jackson v. Unocal Corp., 262 P.3d 874 (Colo. 2011) (Colorado policy favoring class actions, but freedom of contract prevails)